HMRC allowed to appeal Rangers tax decision

AN appeal has been lodged by HMRC over a tax tribunal which ruled in favour of oldco Rangers’ use of Employee Benefit Trusts.

Rangers were under the control of Sir David Murray when they began using EBTs

Rangers effectively won their “big tax case” in November, following a First Tier Tax tribunal which heard the club’s appeal over a bill relating to the use of EBTs.

A majority verdict was delivered that allowed the appeal in principle and declared that the assessments of HMRC be “reduced substantially”. Two of the three judges decreed that only some of the payments made to players through EBTs were taxable but that many of them could be described as loans.

In a statement, two tribunal judges agreed with the club’s outline case, stating: “The majority view reflects the argument that the controversial monies received by the employees were not paid to them as their absolute entitlement. Thus the payments are loans, not earnings.”

The majority view reflects the argument that the controversial monies received by the employees were not paid to them as their absolute entitlement. Thus the payments are loans, not earnings

Tribunal judges statement

HMRC were “disappointed” with the decision and launched an appeal.

Rangers were under the control of Sir David Murray when they began using EBTs. He sold the club for £1 to Craig Whyte last year while the tax liability was in dispute. The old club went into administration in February last year, owing up to £134million to unsecured creditors.

The decision came too late to save the oldco from being wound up and does not directly affect the current Rangers regime.

The club was relaunched in June when the original company entered liquidation.